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How To Do An Operation Warp Speed For Rare Earths

Recently Treasury Secretary Scott Bessent made remarks (which we covered at the time) on how the government was planning to do an "Operation Warp Speed" for rare earths. The good folks at the Institute for Progress, in partnership with Employ America, took that ball and ran with it, producing a blueprint on how to do exactly that. It's predictably excellent.

The report begins with the premise that China has moved beyond mere economic competition and into coercive geo-economic warfare. Through state-backed subsidies, price manipulation, and international asset acquisition, Beijing has secured near-total dominance in both the production and processing of critical minerals. More than 90 percent of global rare earth separation occurs in China, alongside over half of all lithium and cobalt refining. Recent export controls have extended that dominance further, granting Beijing power to restrict not only raw materials but also technical expertise, production equipment, and the activities of Chinese nationals abroad. In practical terms, these controls threaten to cut off the raw inputs for technologies central to American economic and military strength—AI chips, electric vehicles, radar systems, and advanced munitions.

The authors are clear: Washington faces a binary choice. Either concede ground by easing export controls on sensitive U.S. technologies—an approach that would embolden Beijing to escalate further—or build a robust, self-sufficient rare earth industrial base that removes leverage from Chinese hands. The authors argue strongly for the latter. The pandemic-era Operation Warp Speed offers a model: government coordination, targeted subsidies, and regulatory flexibility can compress timelines from decades to months when mobilized with urgency and political will.

To achieve that, the report lays out four pillars.

The first is competition and innovation. The US, the authors argue, must reject the temptation to anoint national champions and instead cultivate a genuinely competitive ecosystem. Their preferred model is not central planning, but structured competition under clear, government-defined targets. China’s own dominance, the authors note, was not achieved by picking a single winner but by funding dozens of firms to compete, then consolidating around the most capable. Similarly, Operation Warp Speed’s success derived from supporting multiple vaccine candidates simultaneously. Translating that to the rare earth sector means broad-based investment incentives, loan guarantees, and purchase commitments that reward technological breakthroughs rather than political connections.

The Trump administration’s recent partnership with MP Materials illustrates both the promise and the pitfalls of such an approach. By using the Defense Production Act’s Title III authorities creatively, mixing equity, lending, and price guarantees, the deal demonstrated how government can catalyze private investment while retaining potential upside for taxpayers. But by granting MP Materials quasi-monopoly status as America’s “national champion,” the administration risks freezing out emerging innovators like Niron Magnetics or Phoenix Tailings, whose novel methods could redefine efficiency or environmental performance. True competition, the report stresses, requires a neutral playing field and technocratic oversight insulated from political favoritism.

The second pillar is allied cooperation. America cannot rebuild a resilient supply chain in isolation. The report envisions a coalition of trusted partners with complementary strengths: the United States and India as anchor consumers providing guaranteed demand; Japan as the financial and technological stabilizer; Australia and Canada as upstream mineral suppliers; and South Korea as a source of low-cost capital and manufacturing know-how. The authors highlight Japan’s post-2010 response to Chinese export cuts as a model: Tokyo financed Lynas’s Mount Weld mine in Australia and secured long-term offtake agreements, enabling an independent rare earth source that later expanded into Texas with U.S. Defense Department support. A formalized, rules-based allied framework, combining purchase guarantees, price floors, and strategic stockpiles, would replace ad hoc deals with durable cooperation.

The third pillar is permitting reform. The report bluntly, and accurately, describes America’s permitting regime as a “litigation doom loop” where even fully compliant projects die under procedural challenge. The Rosemont Copper Mine saga, blocked after fourteen years of environmental review, stands as Exhibit A. The authors call for surgical reform, maintaining substantive environmental protections while streamlining the procedural bottlenecks that drive investors away. Drawing on the CHIPS Act’s exemptions for semiconductor fabs, they propose limiting lawsuits under purely procedural statutes like NEPA and APA, while maintaining compliance with substantive laws like the Clean Air Act and Clean Water Act. Congress should also pass the Mining Regulatory Clarity Act to reverse the Ninth Circuit’s restrictive interpretation of mining rights and allow integrated mine plans across adjacent lands, they argue. Complementary measures, such as the bipartisan SPEED Act, would impose firm judicial timelines and prevent endless remands that paralyze investment.

The fourth pillar concerns trade and export control policy. The report warns against using national security export controls as bargaining chips in trade negotiations with China. Conceding these controls, even symbolically, signals weakness and invites further coercion. Instead, the authors recommend maintaining hard lines on technologies central to defense and intelligence while shifting any negotiation toward economic levers like tariffs or non-security trade restrictions. Export controls must remain sacrosanct instruments of national defense, not transactional tools of diplomacy.

To implement this agenda, the report proposes institutional innovation as well as policy reform. Most intererestingly, the authors propose the creation of a Strategic Resilience Reserve (SRR), modeled on the Federal Reserve, to stabilize commodity markets through financial intervention. The SRR would operate independently, deploying a portfolio of tools—equity stakes, long-term purchase contracts, credit facilities, and put options—to dampen price volatility and ensure liquidity in key materials markets. It could act as a buyer or seller of last resort, much like the Fed stabilizes financial markets during crises. Such a reserve would prevent the kind of price collapses that have historically bankrupted Western miners and left the field open to Chinese acquisition. Congressman Rob Wittman’s proposal to empower intermediaries to provide liquidity is cited as a promising foundation for this broader institutional design.

Underlying the entire report is a clear ideological through-line. The authors advocate what you might call a market-oriented nationalism, or an assertive but disciplined use of government power to catalyze private innovation, protect strategic autonomy, and restore competitive dynamism. The report celebrates pragmatic problem-solving over bureaucratic orthodoxy, and urgency over incrementalism. Success, they argue, will depend less on the volume of spending than on clarity of mission and speed of execution.

The paper closes with a sober warning: China’s rare earth export controls have moved the world past the point of no return. The United States and its allies must now build an alternative supply chain, or resign themselves to dependence on a geopolitical rival whose leverage is expanding by the month. The time for deliberation, in the authors’ view, is over. What remains is implementation: a coordinated, competitive, and relentless Operation Warp Speed for rare earths—an effort equal in urgency and scale to the challenge that now defines the next frontier of American industrial and national security policy.

Policy News You Need To Know

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#Robots #Skynet — The New York Times has a big story on Amazon's ambitious plan to automate 75% of its operations and replace 600,000 workers with robots by 2033. Given that Amazon is one of the last large-scale employers of low-skilled workers in America, some will panic, but this would be short-sighted. The company's Shreveport facility demonstrates the productivity gains at stake, saving roughly 30 cents per item through robotic systems while creating higher-paying technical positions at $24.45/hour compared to $19.50 for traditional warehouse roles. Amazon's automation breakthroughs will likely spread throughout the logistics sector, potentially affecting competitors like Walmart and UPS. The story also notes that Amazon's mechatronics apprenticeship has trained 5,000 workers since 2019.

#Skynet — Speaking of Skynet, there's been a new published statement signed by a bunch of people calling for a ban on superintelligence research. It is signed by luminaries like Geoffrey Hinton, Steve Bannon, Richard Branson (?), and Prince Harry (???). We had thought this sort of Luddism had been defeated at the ballot box, but we guess not.

#Skynet — Speaking of, we're not sure about the policy implications, we just thought this was really cool: Starcloud, an NVIDIA-backed startup, is planning to launch its first AI-equipped satellite in November, featuring an NVIDIA H100 GPU, meaning they will be putting a state-of-the-art data center GPU in orbit. The company's ambitious vision is to build large-scale orbital data centers that leverage space's natural advantages: unlimited solar power, vacuum cooling (eliminating water consumption), and reduced carbon emissions, with projected energy costs 10x lower than terrestrial facilities. While the initial 60-kilogram Starcloud-1 satellite will focus on Earth observation applications like wildfire detection and synthetic-aperture radar imaging, CEO Philip Johnston boldly predicts that "in 10 years, nearly all new data centers will be being built in outer space." The concept still faces significant challenges around launch costs, latency for general computing workloads, maintenance complexity, and scalability, and the technology is still at a proof-of-concept stage. Still—very cool.

#RuleOfLaw — The House Judiciary Committee formally referred former CIA Director John Brennan to the Justice Department for criminal prosecution on Tuesday, alleging he knowingly made false statements to Congress during testimony in May 2023 regarding the agency's role in promoting the now-discredited Russia collusion narrative. Chairman Jim Jordan's referral centers on Brennan's testimony that the CIA "was not involved at all" with the Steele dossier and opposed its inclusion in the 2017 Intelligence Community Assessment, claims that newly declassified House Intelligence Committee documents reportedly contradict, showing that Brennan jointly decided with then-FBI Director James Comey to incorporate dossier material into the ICA and even overruled senior CIA officials who objected to its inclusion. This is obviously very good news. There should be accountability for the worst political abuse of government power since Watergate at least.

#Chyna — Volkswagen has announced that it will suspend production of its iconic Golf model at the Wolfsburg plant starting next week, due a shortage of chips from China. The immediate trigger—China's retaliatory export ban on Nexperia semiconductors following the Dutch government's seizure of the Chinese-owned chipmaker—demonstrates Beijing's willingness to weaponize supply chain chokepoints for geopolitical leverage, a pattern we've seen repeatedly in everything from rare earth minerals to pharmaceutical precursors. What makes this particularly concerning isn't just that a major Western manufacturer is being brought to its knees over relatively simple automotive chips, but that these components are embedded so deeply in nested supply chains that even tier-1 suppliers lack complete visibility into their sourcing, making it virtually impossible to quickly pivot to alternative suppliers. Perhaps the German government, which has long played both sides and been very solicitous to China, will finally see the light.

#Disorder — The great Charles Fain Lehman has a new Substack post highlighting a significant new working paper from Stanford researchers Christopher, Duggan, and Martin that challenges conventional wisdom in homelessness policy. The study examines Los Angeles County's winter shelter expansion program and finds that temporary shelter produces substantial social benefits without requiring permanent housing solutions. Specifically, every 100 additional shelter beds result in roughly one fewer crime per day, reductions in emergency room visits for psychiatric symptoms, and possibly decreased mortality among the homeless population. Lehman argues this research demonstrates that many problems associated with homelessness stem specifically from unsheltered homelessness specifically, rather than housing insecurity per se, suggesting that at the margin, temporary shelter delivers considerably more value than the costly and time-intensive process of building permanent affordable housing. The policy implication is straightforward but runs counter to prevailing progressive orthodoxy: cities need not wait to "solve" or "end" homelessness through permanent housing to meaningfully reduce public disorder, crime, and individual suffering. Rather, they simply need to get people off the streets and into shelter, making this a far more cost-effective and immediately actionable approach.

#Energy — DOE has announced that it will make available up to 19 metric tons of weapons-grade plutonium from Cold War-era warheads to private nuclear energy companies. The companies will reprocess the weapons-grade plutonium into mixed oxide (MOX) fuel or other advanced fuel forms compatible with their fast reactor designs, which can directly fission plutonium to generate electricity. This plutonium source is particularly valuable because it provides an immediate "bridge fuel" to accelerate advanced reactor deployment while domestic uranium enrichment and recycling infrastructure scales up. Unlike traditional light-water reactors that require costly modifications to use plutonium fuel, the fast neutron reactors these companies are developing are specifically designed to efficiently burn plutonium-based fuels. There are two goals: breaking Russia's stranglehold over uranium supply chains, and boosting American nuclear innovation. The DOE has also indicated that companies selected for the program could receive expedited Nuclear Regulatory Commission licensing. Whether this ambitious conversion program can deliver commercially viable fuel at scale remains to be seen, but it unquestionably reflects the administration's willingness to, as the kids say, "just do things."

#Jorbs — The New York Times has a piece out on how defense technology startups are breathing new life into struggling factory towns across the Midwest and Northeast, with companies like Anduril, Swarm Defense Technologies, and Regent establishing manufacturing facilities in Michigan, Ohio, Pennsylvania, Rhode Island, and other states to produce AI-enabled drones, autonomous sea gliders, and next-generation weapons systems. This industrial renaissance is a very good sign for those who pin their hopes on the administration's attempts to revive domestic manufacturing and defense procurement. What's particularly noteworthy here is how this is creating genuine economic opportunities in communities that have been hollowed out by decades of offshoring, while simultaneously addressing legitimate national security vulnerabilities in our supply chains. These facilities are tapping into exactly the kind of manufacturing competency and skilled workforce that never really disappeared from these regions, but just needed the right policy environment and market signals to reactivate. The convergence of state-level incentives, federal procurement reforms, and tariff policy appears to be creating a sustainable model for defense and manufacturing innovation. Let's keep our fingers crossed.

NEW: CS3D Is Just One Way In Which Europe Exploits American Economic Vitality — Second in our article series on the EU directive CS3D and how it affects American business, in collaboration with Baron Public Affairs. Read and share!